Critical Considerations on St. Johns River Dredging/Deepening Project
David Jaffee
Professor of Sociology
The Ports Project
Northeast Florida Center for Community Initiatives
University of North Florida
[revised, March 2015]
1. Total costs for the proposed dredging/deepening will exceed the current estimates
of between $600-$800 million. The project will be closer to $1 billion total and at
least perhaps $400 million from local sources. No projected costs have ever been
overestimated for these types of mega projects.
Current cost estimates do not include the potentially enormous environmental
costs and the other costs associated with accommodating the largest container
vessels and additional cargo – the necessary cranes, bulkheads, turning basins,
and highway/rail infrastructure.
Researcher Bent Flyvbjerg’s analysis of hundreds of infrastructure
“megaprojects”, of which the St. Johns River dredging/deepening qualifies, finds
that advocates for such projects use the following formula to gain support:
PUBLIC/PROJECT APPROVAL = (underestimated costs) + (overestimated
revenues) + (undervalued environmental impacts) + (overvalued economic
development effects)
2. It is important to emphasize that there has yet to be a comprehensive impartial
independent cost-benefit analysis of this project. The Army Corps of Engineers
(ACE) report is not a comprehensive cost-benefit analysis. The sole and singular
benefit that is calculated by the Corps is based exclusively and narrowly on
savings in transportation costs as a consequence of larger post-Panamax vessels
having access to the port terminals. These benefits accrue primarily to retailers,
shippers, and carriers. Further, there is no necessary or automatic relationship
between transportation cost reductions and broader economic benefits for the
local and regional economy, and the Corps report does not calculate any.
3. One thing we do know -- reducing transportation costs, perversely, subsidizes and
reinforces a global trade regime that has contributed to large trade deficits with
Asian producers, as well as the loss of manufacturing jobs to low wage countries.
As long as these transportation costs can be kept low, and be driven lower, the
advantage of shifting production offshore will be retained, and there will be no
economic incentive to produce these goods domestically.
4. Most of the figures used to estimate the economic benefits of this project are
produced by a port consultant – Martin Associates -- that is not an impartial third
party. Martin Associates is closely tied to the interests of the port industry. It is a
consulting firm hired by ports across the country to produce numbers that
leverage a port’s arguments for expansion and public investment. Therefore, the
job and revenue numbers they produce, as well as the assumptions on which the
numbers are based, should not be accepted at face value. They should be
interpreted with great caution and subject to independent peer review.
5. According to a peer review, conducted by the Battelle Institute of the first draft of
the ACE report that actually included some Regional Economic Benefits based on
the Martin data, the peer review concluded that:
The Regional Economic Development (RED) benefits are incorrectly attributed to
the harbor deepening and therefore overemphasize regional benefits of the
Jacksonville Harbor Project.
An accurate assessment of the regional economic benefits generated by the
proposed project is needed to support the overall understanding of project
benefits and of the project’s impact on the regional economy.
6. There has been far less attention given to the quality of jobs generated by the port
logistics sector. Based on Bureau of Labor Statistics data on the local economy,
and consistent with other studies of the port logistics sector, the majority of jobs
are low wage and insecure -- truck driving and warehouse/distribution center
work. Port logistics is not a high wage industry. For these jobs the annual income,
assuming FT year-round employment (and that is becoming less common), is in
the low to mid $20,000’s.
7. Even if the deepening project is approved, fully funded, and completed on
schedule the probability of achieving the desired and projected outcomes is
minimal. This is due to a number of factors:
 John Martin, the President and CEO of Martin Associates, has said
that after the deepening to 47’ feet Jaxport would then have to
conduct an intensive marketing campaign in order to capture cargo
from other ports.
 Port competition on the East Coast is intense and there are other
ports that currently hold huge advantages over Jaxport that are
already moving far more cargo -- such as Miami, Savannah,
Charleston, Norfolk, and NY/NJ. All of these ports are making
their own investments in deeper channels and/or new infrastructure
to sustain and improve their relative position in the East coast port
hierarchy. A 47’ channel in Jacksonville represents no net
competitive advantage in relationship to these other ports.
 By all indications, there will not be enough cargo and shipping
business to justify the number of East coast ports dredging deeper
channels and harbors. Not every East coast port can be the “first
in/last out” – and if everyone tries we will be, and are currently,
engaging in environmentally destructive and financially costly
competition. The net result will be massive port terminal
overcapacity and underutilization.
 One development indicating both the troubled state of the shipping
industry and the uncompetitive position of Jaxport is the formation
of container shipping alliances. These shipping alliances will
account for over half the container traffic on the East coast. The
alliances have disclosed their future proposed shipping lanes and
ports of call. These “revealed preferences” of the shipping
alliances strongly favor Miami, Savannah, Charleston, Baltimore,
Norfolk, and NY/NJ over Jacksonville.
 Even at 47 feet, fully-loaded container vessel entry to Jaxport
terminals for the largest post-Panamax and New Post-Panamax
ships will not be possible due to the requirement for 50’ of water
draft and 180-190’ of air draft. The Dames Point Bridge has an air
draft of 175’.
8. If the city is actually contemplating an investment of at least $200 million it is
imperative that they have an independent and comprehensive analysis of the costs,
benefits, and prospects for success. The Mayor’s Port Task Force hired the
consultant, Xicon Economics, to conduct an analysis of the port and the
deepening project but the study confined itself purely to the financial feasibility
(financial cost in relationship to potential business revenue), did not critically
assess the core assumptions of Martin Associates economic impact models, but
concluded that many other factors should be considered by the Task Force before
a decision is made about a public investment of this magnitude.
9. If a truly comprehensive analysis had been completed, Jaxport and the City of
Jacksonville would see the wisdom of avoiding this costly and destructive
competition with other East coast ports, which will ultimately be unsuccessful,
and accept its status as a second tier “cascade–ready port”.
Jaxport and the local shipping community have many strengths and opportunities
– from its diverse range of cargos to the potential as a Liquefied Natural Gas hub
to its established trade lanes with Central and Latin America ports and Caribbean
transshipment points -- that can make it an economically viable, dynamic, and
successful port without dredging/deepening.
Along these lines, policymakers should also consult with local maritime/shipping
firms (e.g. Crowley) and those that use the Port of Jacksonville, in addition to
Jaxport, and who may have different needs and priorities, but remain a potentially
powerful economic engine for the city and region. The narrow single-minded
focus on Asian containers and channel deepening has displaced the importance
and needs of this critical local business sector.
Finally, since the shipping lines are forming alliances, ports should consider doing
the same. There are three South Atlantic ports within 250 miles of each other that
are currently competing for the same cargo – Jacksonville, Savannah, and
Charleston. It would make perfect sense for the three ports to join together in a
South Atlantic port alliance to strengthen their bargaining position vis-s-vis the
shippers and carriers. This would replace financially costly and environmentally
destructive competition with constructive collaboration.
More information and reports on the local Jacksonville port economy can be found on the
website of The Ports Project at: http://www.unf.edu/coas/cci/ports/
Direct any questions about this document to:
David Jaffee
Professor of Sociology
The Ports Project
Northeast Florida Center for Community Initiatives
University of North Florida
Email: djaffee@unf.edu
Phone: 904-620-2215